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Elon Musk

(3Bl Media/Justmeans) - Will large capital-intensive power plants become the buggy whips of the 21st century, finding themselves in the undesirable position of no longer being needed?

Rob Wile of in Business Insider seems to think so. “It’s been a good run,” he says in the closing line of his assessment of the outlook for the electric utility industry. Citing the sector downgrade by investment bank Barclays from “market weight” to “underweight,” which refers to how much utility investment they are recommending for a typical portfolio, he sees trouble ahead.

That trouble comes in the form of residential solar, which is increasingly taking on the form of a perfect storm from the utilities’ perspective. First, the price of installed rooftop solar has plummeted, falling by half since the year 2000. That led to a rising number of installations, but the utilities could still count on continued sales since they continued to serve as the primary source of storage in the grid-connected systems that have been the predominant configuration. But now the cost of battery storage, helped along by the commercialization of electric vehicles, has also dropped. And if Elon Musk keeps his promise about a super-factory for batteries, the price will drop even further. In this case utilities will be the provider of last resort, only used when all else fails. Yet, even that requires the utilities to maintain roughly the same level of infrastructure as they do today, with little in the way of revenue to show for it.

It is somewhat reminiscent of the old saying, “why buy the cow, if you can get the milk for free?”

The problem is, we need to keep the utilities around, at least for the foreseeable future, because we need them to maintain the grid and to continue to deliver power those who can’t generate their own and also to those who can during those long cloudy spells, when the solar panels are idle and the batteries drained.

Anyone concerned about the planet's future and our ability to bring our climate-disrupting emissions under control, can't help but regularly steal nervous glances at China. What China, with its massive population and prodigious growth rate does or doesn't do, will have a significant impact on all of us. So when China said they wanted 500,000 "new energy vehicles” on the road by next year and five million by 2020, many of which would be driven by first time car buyers newly entering the middle class, that gave us reason to be hopeful. Many have been skeptical that such numbers could be achieved. Especially since last year, only 17,600 EVs were sold. Today, there are approximately 50,000 of them on the road.

But a number of recent developments could be turning up the heat.

First, Chinese EV-maker BYD, which is partially backed by Warren Buffett, has been selling most of their cars in their home city of Shenzhen. Earlier this week, they gained approval to begin selling in Beijing with its population of 11.5 million. Beijing officials will provide a subsidy for EVs and they also commit to installing 100 charging stations in the city by the end of the year with roughly ten charging units per station. This roughly coincides with Swiss electrical equipment-maker ABB's announcement that it would begin making and marketing wall-mounted home electric vehicle chargers in China. The chargers are being developed for Denza, a new joint venture between BYD and Daimler.

Says Chunyuan Gu, ABB's top man in China, "Either you believe or you don't believe. What's difficult to predict is how fast the volume will come."

BYD also received approval this week to sell its plug-in hybrid, the Qin, in Shanghai

China's fast growing car market is attracting the attention of automakers around the globe. Last year 22 million cars were sold there, compared with 15.6 million in the US. Major problems like air pollution and gridlock are leading local officials to tighten restrictions on new drivers' licenses, which will slow the pace of growth. Electric cars, which don't contribute to air pollution are getting a warmer reception.

Some people believe that were are approaching a point of “peak cars” altogether, but that is clearly still a ways off in China.

New York Times reporter John Broder recently wrote of a harrowing experience test driving the Tesla Model S, but data logs taken during the test drive suggest he may have sabotaged the test drive for the sake of a more provocative story.